Tonight on Nightline, one giant step
The economy may be struggling but from strappy sandals to sexy
From cross trainers to crocs, this shoe store is revolutionizing how business
Gets done
From the global resources of ABC News with Terry Moran, Martin Bashi
And Cynthia Mcfadden
In New York City, this is Nightline
If you're looking for a certain pair of shoes, there's a warehouse in Kentucky
That probably has them. They've got a thousand brands in just about every
Style, size and color
Four million pairs of shoes
24 hours a day they're boxing them up and shipping them out
To shoe shoppers sitting in the comfort of home.
Good morning and thank you for calling Zappos.com
Where Elvis once was spotted in our warehouse looking for a pair of blue
Suede shoes
This is Zappos.com and what Amazon did for books
Zappos is doing for shoes. They're trying to revolutionize how business is done
And how people work. The name is an adaptation of the Spanish word for shoe
And this year, nine years after going into business
Zappos is on track to sell a billion dollars’ worth of shoes
You will have these shoes on Monday by free upgrade
yeah
And they're having a party doing it. One night it was a toga party
Work hard, play hard
Is everybody having a good time? Yeah
Tour the Zappos offices and there's a cheerfulness you won't find
In the dull offices of corporate America
Hi, everybody. Thanks for coming
Every department has its own way of greeting visitors
Zappos' headquarter is in Las Vegas, where they do have office carol like almost
Any other corporation
But right there in the middle, we may have missed him
There he is. Tony Hsieh, the emperor of shoes
With no more office space than Dilbert.
One of the things that's really important for us
Actually probably the most important focus for Zappos is to make sure we have
The absolute best company culture
And part of our culture is just having a family like atmosphere
And at times it looks like one of those
Internet startups that disappeared when the bubble burst
Go! Here's the entire finance department racing
Pine wood derby cars in the office but unlike those failed startups
Last year Zappos made a five percent profit. Not bad
And in multiples how many times more than a call center worker do you make?
I don't have a calculator, but I...
My salary is $36,000 dollars a year, so...
I think someone may make more than me
Some of the people in the call center make more? Yeah
Of course, he can afford it
Just a few years after college, Hsieh sold the Internet company to Microsoft for $265 million dollars
But you wouldn't know it
How many pairs of shoes do you have?
I probably have about 10 pairs right now
But prior to Zappos, I used to have one pair that I would wear for two years until it has holes in it
And then buy the same pair again
So you are not that into shoes I’m not that into shoes
What he's into is building a company where
People love to work and customer like doing business
We would just want to be about the very best customer service and the very best
Customer experience
Selling shoes over the internet would seem difficult
People wanna try them on, see the size and color. Zappos overcame that with
Free shipping, both ways. Order as many shoes as you like
You have a year, 365 days
To return what you don't want. Okay and then once we get it back in
And it can take 48 hours to process back in
But we will refund you for the $41 dollars
And if they treat the customers well
They do pretty well by the employees, too. Free food is always available in the cafeteria
So even the snacks are free
Go E5
And here we go
I'm enjoying it
But that's nothing. The company also pays 100% the medical and dental benefits
Why in this world there's such a revolutionary idea to treat your employees and your customers well?
Yeah, I think just because you don't really see the payoff right away
You see the payoff year two years sometimes three years down the line
It's a great day here at Zappos. This is Stephanie. How can I help you?
At the heart of the Zappos' revolution is the call center
Where actual human beings answer the phone. Hi, pal, how are you doing?
A lot of companies have learned that they can be rude to their customers
They can give them bad service They can even not answer the telephone
And people still have to do business with them
And right today that's because they don't really have a choice
How can I help you today? 95% of Zappos’ business comes over the Internet
But they spend a lot of time and money
Training people to talk to customers on the phone
There's a four-week training course that every single employee
From the executives on down are required to take, even if their job don't usually require talking with customers
I’ll be happy to help you with that Do you know that you know your order number?
You don't know your order number. OK, no problem
Do you have a phone number that would be on your account?
Sari Levine already works in the design department
But she was a member of the latest call center class
And just before they were hired
She and the rest were offered cash to walk away
We are actually increasing the offer to $2,000 dollars
But today is the last day
Were you gonna...The truth is...
We offer them money to quit because we really want to make sure that
People that are working at Zappos are truly passionate about the company
And this is the place that they want to be
Very few take it Are you ready to get started?
For the graduates business ceremony
And circumstance, diplomas, the Zappos pledge
I'm on a Zappos mission to live and deliver WOW
I'm with core values and gonna start now I'm with core values and gonna start now
They actually do have a list of 10 core values
Create fun and a little weirdness
It's just a fun way of saying that we really respects and celebrate everyone's individuality
Pursue growth and learning Do a lot of people tend to get kinda stuck?
I think it's just really important for people to feel engaged
They always need to feel like they're learning and growing
I noticed immediately coming in
At a graduation ceremony people smiling and laughing and clapping and making jokes
But you were very reserved
Yeah, and that's part of what I mean. When I say, I'm not the one that is
Saying okay here's what the culture should be
Why isn't your phone center in India?
Because we don't think you're gonna be able to give
Great customer service by outsourcing it
And for us, customers...if customer service is what our brand is going to be about
Then you can't outsource that If a customer is looking for
A specific pair of shoes and we're out of stock their size, say
Everyone here is trained to look on at least three competitor web sites
And they find the shoes in stock of our competitor, direct the customer to the competitor
And that… What do you get out of that?
Somebody else sells the shoes Yeah, we lose that sale
What they get they think is customer loyalty
75% of their businesses is people who come back
And part of their training is exposing employees to every part of the business
Remember Sari Levine?
After finishing her training at the call center she's now shipping shoes in Kentucky
And your last number should be 3184
Part of the training program we call it KY boot camp
We got our Kentucky Fulfillment Center
And you do understand
Every single aspect of how the warehouse works
Now Zappos is branching in the things like clothing and electronics
They're not stuck on shoes
And so we'll listen to our customers and try out different suggestions
They even suggested cookware, so we're selling cookware
So you just have customers who like you so much
They just want to do business with you
Almost no matter what it is they're buying
Yeah, we have received emails from customers that have asked us to
Start an airline and you know we're not gonna do that this year
But thirty years now I wouldn't rule out as a Zappos Airlines
In that case you probably have to pay for shipping
This is Brian Rooney for Nightline in Las Vegas
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