“I want an extra hundred bucks or your pretty little lightbulbs die!”
Full disclosure … that’s not exactly what the delivery man said last December to a European customer who had been anxiously awaiting her online order. Still, she could be forgiven for feeling like her shipment was being held for ransom.
“We had a tirade of angry emails from customers,” recalls Paul Austin-Menear, Director of Digital Strategy at Nanoleaf, a green technology company offering innovative LED and IoT lighting solutions.
The delivery driver, according to Austin-Menear, had indeed demanded one hundred Euros (USD $116) before handing over the package the customer had already paid for.
Is it a new wave of ecommerce extortion?
Not exactly, but it is a growing pain experienced by fast-growing merchants expanding internationally. In this case, the order in question was manufactured in China, shipped from a warehouse in Hong Kong, and delivered to a customer in Europe.
“The customer got slapped with taxes, tariffs, and additional courier fees we didn’t know about in advance,” says Paul Austin-Menear, Director of Digital Strategy at Nanoleaf. “I remember thinking wow, we needed to do better internationally so our customers aren’t being surprised with unexpected taxes and fees at their doorstep. If it was me, I’d be mad too.”
It’s a challenge that would eventually be overcome and result in a physical footprint in thirty countries and an online presence in eighty.
It’s also one that was born in a Chinese factory where three buddies lived and worked to create what they call the black sheep of the LED lighting industry …
“Don’t Give a Damn”
The most efficient LED light in the world …
That was the idea Gimmy Chu, Tom Rodinger, and Christian Yan had when they launched a Kickstarter campaign in 2012 for a new kind of lightbulb that resulted in more than 5,000 backers pledging over $270,000. In fact, the demand was so great the three founders lived in the Chinese production facility for six months to make sure the first bulb was perfect.
Since then Nanoleaf has evolved into a green technology company in the business of designing future-proof lighting products that beautifully blend design and technology to allow people to personalize their lighting experiences. For example, Nanoleaf’s breakout product is the Aurora, modular smart lighting delivered as individual triangles that customers can fit together in nearly any shape imaginable, kind of like colorful LEGO for lights. They’ll also react to music, with a much-anticipated audio sensor accessory due August 2017.
“It’s not just about creating lighting,” Austin-Menear says.
“We offer people a canvas for personal expression that just happens to also light up and can be controlled via voice, and automate your lighting environment throughout the day.”
Retailers like Apple and Best Buy have taken notice and carry Nanoleaf’s offerings in hundreds of stores around the world. That’s how Nanoleaf generates the bulk of its sales. However, it’s also doggedly focused on growing its ecommerce channel which it expects to account for 15-20% of overall sales in 2017.
But remember that package being held for ransom in Europe?
To grow its ecommerce channel Nanoleaf would have to solve its international supply chain, logistics, and fulfillment issues. It’s one reason Nanoleaf upgraded to Shopify Plus and set up four separate international storefronts fed by strategically located warehouses.
The international storefronts offer content in native languages, allow customers to checkout in their local currencies, and offer faster local delivery (often for free) without surprise taxes and fees.
“Our motivation was simple; be better for the customer every single day,” Austin-Menear says. “We needed to offer customers a better experience and get them their orders in a timely manner and that’s what our international storefronts and warehouses allow us to do.”
Besides innovative design and technology, Nanoleaf dubs itself as the black sheep of the lighting industry, in part, because it pays little attention to industry “end of life” standards the company says are in place to generate unnecessary sales by fooling customers into throwing out lighting that still has a lot of life and light left to give.
“We don’t give a damn about the industry’s end of life standards,” Austin-Menear says.
“We over-engineer our products so they can last beyond the ‘rated’ lifespan and don’t wind up in a landfill. We want to make a net positive impact on the planet, not just another unnecessary sale.”
It’s brash, courageous, and noble ...
So then why does the company hide the good they do from like minded customers?
60% Conversion Rates?
It’d be cheaper just to glue it.
I’m talking specifically about how the Aurora’s diffuser attaches to the product’s chassis. The margin-boosting adhesives that are so tempting to use generate toxic by-products, according to Austin-Menear, making them inconsistent with the company’s commitment to the planet.
Instead, Nanoleaf relies on ultrasonic welding to fuse the diffuser onto the chassis, though getting Austin-Menear to talk in detail about Nanoleaf’s green initiatives is like pulling teeth:
“There’s a lot of greenwashing out there and the result is that people just don’t believe companies when they talk about green initiatives or corporate social responsibility. So we just don’t talk about it despite the fact that it’s who we are at our core. We can practice without preaching and do just fine.”
The company’s commitment may be buried on a back page of its site, but you can witness Nanoleaf’s dedication to positively impacting the planet by inspecting its checkout. Specifically, Nanoleaf was recently part of a pilot project spearheaded by Shopify Plus Merchant Success Manager Kyle Kozma which offers customers an option to make a charitable donation as they are checking out.
In Nanoleaf’s case, the company partnered with the World Wildlife Fund to offer customers already paying an average $250 per order to donate an extra dollar to the charity:
- Since March 2017, 60% of Nanoleaf customers have made a donation
- In other merchant tests, customers have donated as much as $50 dollars at checkout
- In one case, a merchant partnering with a charity netted more than 6,000 donations that averaged 14.74% of AOV (average order value)
As Austin-Menear explains:
Our customers love it because they share our values. We love it too because we’re still very much like a startup with almost no free time and this was an easy way for our team to contribute to charity without a big time commitment.
Interested in adding donations to your checkout?
Quick Setup Guide: How to Offer Donations At Your Checkout
Nanoleaf credits Shopify Plus with customizing their cart to accept donations and plans to roll out the checkout donation option in its European storefront in late 2017. It’s technology created by Plus’ merchant success front end development (MSFED) team which offers theme and front end development expertise to merchants and partners.
Stephen Pankratz-Brown, an MSFED team member, suggests merchants desiring to offer donations at the checkout should begin by creating a “donation” product.
“For this product, each variant would be a pre-set donation amount. You could make a product with only one variant and suggest a simple $1 donation for every cart, or have a product with multiple variants, each one being a different pre-set donation amount like $1, $5, $10, or, $25.”
Next, Pankratz-Brown says to keep the following three things in mind:
1. You’ll only want the donation product to show up on the cart so be sure to customize your theme to hide the product.
Do this by setting a product type of ‘Donation’ and checking for that in your theme code to hide the product in any product loops. (collections, related products, recently viewed, etc)
2. Make a new collection called ‘All’ and have it be a smart collection that will show everything but products with a product type of ‘donation.’
Naming it ‘All’ will allow the collection to override the default ‘/collections/all’ route that shows every product visible on your online store.
3. Add theme customizations to your product template that will re-route traffic intended for your donation product to a different page.
Understand, the bulk of the theme customizations will be on the cart and vary based on the theme being used and whether your theme uses an ajax cart drawer, or a static cart page:
For single donation levels
Use a checkbox that triggers the donation on or off. When it is checked and changed to true, you can use an ajax call to add the donation product to the cart, and when it is unchecked, you can do the same to remove it from the cart. When you load the cart page (or drawer) hide the donation product from the normal cart loop, and check the box by default if there is a donation product currently in the cart
For multiple donation levels
It’s a two-step process; one checkbox for the customer to say, “Yes, I would like to donate to this cause.” When that box is checked, you can show a group of radio buttons, each corresponding to one of the donation variants. Once a radio button is selected, any donation products currently in the cart (if applicable) should be removed, and the selected product should be added. If a price option is selected, and the “I would like to donate” checkbox is unchecked, the donation product should be removed from the cart, the radio buttons should be deselected, and then hidden.
Save $1 Million (With Just Your Signature)
The donation option positions Nanoleaf to show the world its values rather than talk about them ...
Despite the pilot project concluding, Nanoleaf has decided to continue offering customers the option to donate at the checkout. Expect Nanoleaf to consider the donation option as well when it eventually expands into new markets like the United Kingdom and Brazil.
“We don’t make a single business decision without considering its impact on the planet,” Austin-Menear says. “We’re not money hungry or trying to become millionaires overnight.”
That doesn’t mean Nanoleaf isn’t financially successful though:
- Sales are expected to grow 5-7 times during 2017
- Ecommerce volumes are expected to increase 8 times
Let’s say we’re talking about one million dollars in sales. Switching to Shopify Payments reduced our payment processing fees from 3.4% to 2.15% so just signing up would save over $12,000.
Expect Nanoleaf to pour those savings into R&D that leverages its design and production innovations to create new smart lighting solutions for a wide range of currently undisrupted markets.
“We’re passionate about making sustainable lighting products the default choice, not because they’re sustainable but because they’re cool,” Austin-Menear says.
“Environmentally friendly products won’t be truly mainstream until there are no other options and Shopify Plus has been a great partner in helping us move toward achieving that vision.”
“Being on Shopify Plus has increased our velocity of cash flow, which for us is all about self-funding bigger parts of our R&D operations.”
“When you’re going head-to-head with some of the biggest companies in the world like we are, every dollar and every minute saved helps build your competitive advantage.”