Cities of the future: an alternative vision
Some of you have probably noticed, even if the decline is gradual: our towns’ businesses are suffering.
The gap between luxury and low-price brands is widening, leading to the gradual disappearance of individual shops and the middle segment in many cities. We are increasingly faced with a binary choice: high luxury or extremely low prices, both of which are generally represented by dominant international chains.
While the big luxury brands emphasize superior quality to enhance their image, mass production and distribution chains are establishing a standardization of low prices and an abundance of choice in our minds. This trend is further strengthened by the next step: “e-commerce”.
Who benefits?
First of all, there are the “new” consumers: those looking for the lowest prices, unlimited choice and the convenience of shopping at any time, outside the traditional opening hours of local shops.
The big beneficiaries of this change in consumer behavior, accentuated since the Covid period, are the online retail behemoths. Experts in logistics, they operate in a very different environment from that of real commerce: they benefit from the necessary critical mass, and are freed from the constraints and costs that weigh on physical commerce. Every year, they post record profits, bolstered – thanks to their financial bargaining power – by tax breaks unavailable to local retailers. Let’s remember LuxLeaks, in 2014, having brought to light the tax agreements concluded with giants like Amazon, FedEx, and PepsiCo and many other giant groups, often American. While these arrangements may have provided a temporary fiscal advantage for the country, it seems increasingly clear that the power and commercial strategies of these groups are having a detrimental impact on local trade in the medium and long term.
The challenge
Urban desertification and standardization of supply
Individual businesses, burdened by exorbitant costs for limited space, dwindling local resources and time-consuming administrative constraints, are on the verge of giving in.
Faced with the rising costs of regulatory compliance, commercial property owners are no longer able to pass on these additional charges to retailers. Many landlords prefer to sacrifice rental income rather than reduce their financial requirements or make the necessary investments. As a result, the value of their real estate has fallen, and the desertification of town centers has exacerbated the decline in value.
Undermining our social standards
Everything has its price, and when the end consumer benefits from particularly advantageous rates, this cost is externalized to others. By opting for cheap products from faraway lands, we are often unaware of their true ecological, ethical and social impact, including the sometimes precarious working conditions, even involving child labor. This practice undermines our own social norms, revealing an underlying form of hypocrisy in our global consumption choices.
Impact on health and the environment
Here are two examples of the personal consequences of cheap consumption:
Nutrition: Industrial foods, rich in sugars and poor in nutrients, encourage us to consume more in quantity to compensate for the lack of quality our bodies need. The real cost is our health.
Fashion: In the world of fast-fashion, where new collections are launched at a frenetic pace, we are constantly encouraged to keep up with the latest trends. Clothes manufactured under these conditions pollute our waters with their fibers and dyes, often produced in faraway countries where working conditions are precarious. This culture of over-consumption generates “disposable” products that lack value and sustainability, ultimately posing a major challenge in terms of waste management on a global scale.
Where there’s shadow, there’s always light
The success of our cities and our national economy will depend on a collective effort.
National policy
Promoting local trade in a free, non-centralized economy is indeed a delicate challenge. With the marketing budgets of some economic giants exceeding the gross national product of our entire country, our local political leaders have limited room for maneuver.
However, especially in a small country like ours, this promotion could be achieved through simplification and structural centralization initiatives. Possible avenues include:
- centralization and implementation of the concept of service within administrations (e.g. assigning a dedicated advisor to each retailer, who in turn handles all the necessary procedures);
- clear coordination with chambers to organize the specific needs of shops ;
- subsidies for local and sustainable initiatives;
- the implementation of a system of thresholds for rents and penalties for empty premises at municipal level, while alleviating or even subsidizing exaggerated compliance constraints for landlords;
- a reduction in bureaucracy and a return to pragmatism, thus improving efficiency within departments;
- promoting entrepreneurship ;
- targeted communication campaigns.
Consumer awareness
Lacking critical mass, small businesses lack the necessary bargaining power when it comes to purchase prices or rents. Comparing large international groups, including e-commerce, to individual businesses is like comparing apples to pears. Acknowledging that local businesses are subject to different costs from those of large groups is a valuable first step. If we want to see individual and varied businesses in our towns and cities, let’s accept the specific realities on the ground. By prioritizing quality over quantity, we’ll discover many unexpected benefits.
A contrarian approach for retailers
Today’s retailers are facing a major upheaval in their business. In the face of current trends in digitalization and artificial intelligence, the business models of the 80s are a thing of the past; today, those who succeed are those who offer something unique: quality, service, originality in selection, and above all, that essential human connection that online giants and artificial intelligence can’t offer. Tomorrow’s stores will be those that go beyond the simple role of point-of-sale to adopt a sustainable, responsible and human-centered approach.
Property owners’ liability
Today, it’s the high rents in Luxembourg that are stifling individual businesses. Commercial property owners thus play a crucial role in the vitality of urban areas. By adopting more flexible short-term rental policies, such as sales-related rents, they have considerable power to contribute to the prosperity and security of cities, while enhancing the long-term value of their property.
What kind of city and society do we want to leave our children?
Do we want deserted cities reminiscent of Western movie sets, where only straw bales twirl through the streets, or uniform zones dominated by omnipresent international channels?
Or do we prefer vibrant town centers, with a diversity of local businesses and friendly meeting places?
Together, we have the power to shape the cities of the future. Let’s take back control of our choices today and build living communities.
Each of us holds part of the solution. So what are we waiting for?
