Luxury fashion brands such as Gucci, Saint Laurent and Louis Vuitton are using social media to appeal to millennial customers to great effect, according to a report.

The industry's larger companies are using clever e-commerce and digital strategies to attract younger customers, UBS said in its European Luxury report, published Tuesday.

This, it added, is contributing to polarization where the big names have gained market share over smaller brands during the past five to 10 years.

"Our view is that the brands winning over new consumers (notably millennials) are those gaining share," the report stated.

The Kering-owned Gucci is so successful at attracting younger customers that 50 percent of its sales are to millennials, while the figure for Saint Laurent (also a Kering brand) is even larger at 65 percent.