comScore’s analysis of holiday shopping trends during the 2009 season was, in some ways, reassuring, with online sales during the November – December period growing 4% over a disastrous 2008 period. However, a closer examination reveals that for smaller retailers it was another bitterly disappointing shopping season for small business owners and entrepreneurs. BIG fishes got FAT, the smaller ones getting HIT!

So, what a small retailer to do in this ultra competitive market environment? Well, staying close to your customers is probably more important than ever. We think that using social networking to build communities of customers and then reaching out to them with relevant and frequent communications holds a lot of promise, especially for smaller retailers. They should be able to execute better than their larger competitors.

For one thing, they don’t have to deal with the internal organizational bureaucracy and delays that can hinder many larger companies when deciding how CRM / social networking programs should be executed. And, the use of social networking offers significant opportunities to reduce marketing costs, which will help smaller retailers overcome the challenge of their larger competitors’ greater financial resources.