Online sales project more than triple US$74 billion by 2025, involving one in every five luxury sales.

The Age of Digital Darwinism report says there is a growing need for luxury brands to have digital competency, with McKinsey expecting the bricks-and-mortar environment to become dependent on digital.

E-commerce sales are growing rapidly, making up 8 percent of total luxury sales of online personal luxury goods of $20 billion. Monobrand online stores are currently dominating, by rapidly growing on multibrand platforms. These e-tailers or marketplaces were born digitally, giving them an advantage over brands having to adapt legacy systems, says the report.

Consumers have become more active in the luxury online sector, whether it is sharing content about brands on social media or participating as a secondhand seller or curator.

In an increasingly digital ecosystem, those hovering for success are adopting what McKinsey dubs a “Luxury 4.0” model. Which integrates customer data with production mechanisms and design, aiming to create a seamless process from concept to consumer. Luxury is centred on tradition and craftsmanship, 60 per cent of luxury managers see their brand selling 3D-printed goods within in the next decade.

Luxury brands are also facing competition from outside the industry. Amazon is changing customer behaviour, turning consumers into online buyers and making pushes into categories such as beauty and fashion. Amazon also accounts for 55 per cent of consumer product searches. Converging thriftiness and desire for sustainability is creating new models for consumption, such as rentals and secondhand marketplaces, the report notes.