Dear …
Thank you for your interest in the position of _______________with our company.
While we were impressed with your knowledge and background, we have made a decision to fill the position with someone who has demonstrated more advanced skills in the area of _______________. This individual also had the advantage of being familiar with our ______________ system.
We will keep your resume on file for future consideration of a position that may become available that matches your skills.
Sincerely,