Founded in 2012 by three engineers wanting to shake up the lighting industry, Nanoleafhas become a global consumer electronics company specializing in cutting-edge LED lighting. The brand is a pioneer in modern smart home design, paving the way by continuously working to redefine the space and rethinking what's possible with constant innovation and personalized designs.
Since upgrading to Shopify Plus, Nanoleaf has been able to:
- Turn its direct-to-consumer (DTC) offering into its most profitable sales channel
- Scale its global commerce and successfully expand to the U.S., Europe, Asia, and Australia
- See a nearly two-fold increase in business intelligence gathering efficiency, and get products to customers 25% faster
Challenge
As Nanoleaf continued to grow and expand its presence around the world, the need to build a strong ecommerce capability meant the company could be less beholden to retail and distributors, gain leverage and strength when it comes to negotiating purchase agreements, attain greater margins, and tap a global audience.
"In the early days, most of our energy was spent on product development, R&D, and getting into retail. The traditional thinking was that a retail presence would be how we make money," says Paul Austin-Menear, VP of Commerce Operations at Nanoleaf.
“Ecommerce disrupted that. Prices started to decline in an environment where brands can sell direct-to-consumer (DTC). Retail margins for a lot of consumer electronics is only 5-10%. A retail-only model is not a sustainable business model in this industry. Moreover, the company's warehouse and 3PL—where the business coordinated manufacturing and purchasing—was based in Hong Kong SAR. An unfortunate byproduct of global trade is that customers were being charged customs and duties by their couriers and foreign exchange fees by their credit card providers.
Solution
By upgrading to Shopify Plus, Nanoleaf was able to build a truly customer-focused buying experience that eliminated previous issues with global trade like slow shipping and added duties and taxes for the customer upon delivery.
Upgrading to Shopify Plus also meant being able to charge customers in their own currencies. This meant eliminating the unpleasant experience of foreign exchange fees coming from customers’ banks for purchases made in U.S. currency versus local currency. And perhaps most importantly, it meant having the ability to more easily and quickly localize content to meet the unique needs of every customer.
“Shopify’s app ecosystem was a big selling feature. We didn’t always have dedicated dev resources to build out our ecommerce and marketing capabilities. We relied on the app ecosystem to offer our customers the sophisticated experience that set us apart from competitors," explains Austin-Menear.
In addition to leveraging Shopify's robust global commerce tools, Nanoleaf was one of the first adopters of Shopify Flow, which helped the brand automate much of its digital marketing, particularly email marketing.
And thanks to Hydrogen, Shopify’s headless commerce stack, the brand now uses custom storefronts to host rich media to adequately showcase products and tell a more powerful story, while leveraging Shopify Plus’ infrastructure and backend for operations, marketing, and checkout. This has enabled Nanoleaf to focus more of its energy on creating highly impactful creative that better supports the global nature of its operations.
Finally, through the Shopify Plus and Microsoft Dynamics 365 Business Central partnership, Nanoleaf has been using Microsoft ERP (Enterprise Resource Planning) to improve data processing and management, make better business decisions, and provide significantly faster shipping to customers.
"When you're working with retailers, you're getting spreadsheets in all different formats and languages. We were spending so much time manipulating that data to match the format we needed. That's where the Microsoft ERP integration comes in. Basically, it automates and aggregates data from different channels and layers it together with our Shopify data to create very powerful insights," explains Austin-Menear.
Results
Shopify Plus is now one of Nanoleaf’s highest revenue generating channels, and represents its most profitable sales channel—even after factoring in fulfillment costs.
Since going headless with Shopify, Nanoleaf has doubled its conversions and page load speed has improved by 375%.
Related specifically to its Microsoft ERP integration through Shopify Plus, Nanoleaf has seen massive improvements to data-gathering and management efficiencies, as well as faster shipping times.
The way Shopify has architected its APIs and exposed that functionality to its customers has enabled our team to implement powerful customizations, quickly and easily. We wanted to own the customer experience end-to-end without investing huge development resources. Shopify Plus enables that.
