In a decade, the luxury retail sector could be 'unrecognisable'.
Deloitte has released its second annual Global Powers of Luxury Goods report with surprising findings.
While luxury brands continue to drive revenue in Australia, analysts believe that the impact of technology will force the industry to reshape.
According to the report, 58 per cent of millennials go online to search for information on luxury items, with 31 per cent using social media to gather information on discounts and promotions compared with just 10 per cent of older consumers.
In order to survive, Deloitte partner and industry leader David White has some critical advice for luxury brands.
“Several key aspects of the luxury sector will be unrecognisable in the next few years.
"The traveling luxury consumer will change the concept of national boundaries; millennial consumers will represent a significant percentage of sales volume in luxury; and the competitive forces driven by technology will continue to disrupt at a faster pace.
"As such, global luxury brands must overcome significant challenges in order to maximise engagement with their digitally-savvy, time-sensitive and socially aware consumers or risk being left behind.”
White also said that rising wealth in Australia as well as our proximity to Asia have contributed to a consistent surge in luxury sales.
“The luxury sector in Australia has seen significant growth in recent years.
"This has been fuelled in part by increasingly wealthier Australian consumers with a growing hunger for high end branded products, coupled with strong demand from international tourists visiting Australia, particularly from Asia.
"The recent devaluation in the Australian dollar has further encouraged tourist spending on luxury goods in Australia.
Whilst a relatively small market globally, Australia continues to be attractive for luxury brand retailers due to our consumer wealth, spending patterns, and proximity to Asia.”
The report states that the world's 100 largest luxury goods companies generated sales of US$214.2 billion as of June last year despite currency headwinds and technological disruption.