Mobile couponing can also lead to greater competition
among retailers. Typically, retailers use mobile couponing to
retain customers. Retailers can send mobile coupons to those
who have opted-in periodically and when consumers are close
to their physical store to induce them to purchase and improve
loyalty. However, mobile couponing by competing retailers
could lead to a prisoner's dilemma if competitive retailers adopt
the same mobile couponing strategy and if a consumer has
opted-in to the retailers' mobile messaging services. For
example, a consumer, who is at a mall or road that is close to
both a CVS drug store and a Walgreen drug store, may get alerts
from both the stores with mobile coupons. The consumer can
compare the offers and choose one store to visit if the consumer
perceives that the set of offers from one store is superior to those
from the other store. In such a scenario, the retailers may be
forced to offer competitive coupons and accept lower paid
prices to avoid the risk of losing consumers to one another.