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 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 Music