Episode Summary
Episode Eleven: Gen Z – What Happens When Ethics Become The Expectation
In this episode of the PAX Hospitality Podcast, Leon Kennedy is joined by Tim Varney, Loren Daniels and Michael Bascetta to unpack The Gen Z Retail Revolution report from Principals — and what it really means for hospitality. Leon frames Gen Z as a “retail earthquake” and a clear changing of the guard: the playbook that worked for the last 20 years is falling over, and operators can either double down on the old rules or pivot into a new reality where Gen Z is both a powerful customer segment and a huge chunk of the workforce.
The crew walk through the report’s five big shifts: social commerce (TikTok and Instagram as shopping engines, not just entertainment), hybrid experiences (stores and venues as “experience theatres”), hyper-personalisation, ethics-as-standard and “localism in a global context.” They connect the stats to lived examples: 73% of Gen Z buying off influencer recommendations, guests expecting venues to be content-worthy stages, the demand for transparent ethics over greenwashing, and the tension between global brands and deeply local stories and partnerships.
From there, they zoom in on the practical implications for restaurants, cafés and bars. They talk about how to design venues that Gen Z actually wants to visit, how to empower frontline Gen Z staff instead of ignoring them, and why values-first, creator-led brands are winning. The episode closes with a clear challenge: stop treating Gen Z as a niche youth segment and start treating them as a market reset — then chip away at community, content, ethics and experience, one small actionable move at a time.
Read: The Gen Z Retail Revolution by Principles
Read: Sip Happens by Time Out
Read: Showrooming at Best Buy by Harvard Business School
Read: The turnaround of Crocs and Stanley spearheaded by Terence Reilly
Topics Covered:
The Principals Gen Z Retail Revolution report and the “changing of the guard” in retail and hospitality.
Five critical shifts: social commerce, hybrid physical–digital experiences, hyper-personalisation, ethics and localism.
Gen Z’s contradictions (digital vs real world, broke vs quality-obsessed, nostalgia and novelty) as product and brand opportunities.
What Gen Z expectations mean for venue design, content, values, and how hospitality brands show up day-to-day.
The role of creators, micro-influencers and frontline Gen Z staff in shaping brand direction and decision-making.
And the 5 key takeaways?
1. Gen Z is a market reset, not a side segment.
They’re a massive slice of population and spending power — and they’re also your current and future workforce.
“Gen Z is this like retail earthquake, you know, that’s about to happen… It’s part of the market, which means it’s also probably part of your workforce.”
2. Social commerce is infrastructure now, not a campaign.
TikTok and Instagram are where discovery and purchase actually happen — especially via trusted, niche creators.
“73% of Gen Z purchased by influencer recommendations… That is three times higher than traditional ads.”
3. Your venue is an experience theatre, not just a shop or dining room.
Digital shopping hasn’t killed in-person — it’s raised the bar for what in-person has to feel like.
“Physical stores must act as experiential stages for content creation… digital shopping doesn’t replace in-store, it actually raises expectations for it.”
4. Ethics have to be proved, not performed.
Greenwashing, vague “local” claims and buzzwords won’t cut it; this generation has the receipts in their pocket.
“Sustainability and social values aren’t just nice to haves. Brands must offer proof, not promises… No more greenwashing.”
5. If you want to understand Gen Z, listen to the people already in front of you.
Your Gen Z frontline staff see reality first; ignoring them while senior leaders make every decision is a missed superpower.
“There is a layer of people here that make all the decisions… The last people that they listen to… frontline is the Gen Z… It’s like maybe listen to them.”
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Credits
The PAX Hospitality Podcast is produced by PAX and Craate Creative. Support for this podcast comes from Square and Brunswick Design and Innovation. Our music is produced by Patricia Heath and Mattias Westergren.