They say every contest eventually turns into a two-horse race. Given how the soda wars have been whittled down to Coke and Pepsi, U.S. political parties have been pared down to just Democrats and Republicans, and most hardware purchases happen at either a Lowe's or a Home Depot, the adage seems to be true.

On the consumer goods retailing front, the two remaining titans are, of course, Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN). The former had a clear head start, but the latter has made good use of technology to become the powerhouse it is today. Amazon's investors are certainly more enthusiastic about its future than Walmart's shareholders seem to be, and for good reason. The e-commerce giant has become something of a lifestyle company, quietly ingrained into our everyday lives. That's exactly where a company wants to be.

During the next lap of this particular horse race, however, Walmart is well-positioned to regain some lost ground.

Amazon's growing well, but Walmart's future growth may be uncharacteristically strong

Image source: Getty Images

Step 1: Triage

Think back to 2013. It was a time when unstocked Walmart shelves weren't uncommon, and neither were customer service complaints. Employee morale at the retailer was in the gutter. And it had no e-commerce platform worth speaking of.

Amazon took advantage of all of those weaknesses, boosting its U.S. retail revenue from $34.8 billion in 2012 to $170.8 billion in 2019. That's nearly five-fold growth in just seven years.

To its credit, Walmart responded by making some changes. Naming Doug McMillon as CEO in early 2014 was a big one. He's turned up the heat on the company's online efforts, which has paid off -- its U.S. e-commerce sales grew 40% last year. Sweeping pay increases put into place in 2015 and 2016 not only led to improved morale, but seemed to suggest the company had begun to view payroll as an investment rather than an expense. Curbside pickup of online grocery orders is now available at most of the company's U.S. stores, and at all of its Sam's Club locations.

In sum, these shifts suggest that Walmart has finally become what it should have been aiming to be all along. However, with all these initiatives already underway, there doesn't appear to be a sales-boosting, efficiency-extracting next act in the cards.

Except there is.

Step 2: Think like your customer

Walmart's past few years have been dominated by its evolution. In the next few, however, it looks to be preparing for something of a paradigm shift into a modern-retailing mode that focuses on convenience and lifestyle.

Case in point: Earlier this month, Recode reported the company appeared to be moving forward with a subscription-based service that will offer same-day delivery of online grocery orders. Discounts on gas and other goods would be among the program's amenities, along with early access to certain products.

If that sounds a lot like Amazon Prime with a physical retail component, it should. While Walmart hasn't said as much (technically, it hasn't even confirmed that such a subscription program is on the way), there's little doubt that the more than 150 million Prime members Amazon says it serves across the globe ultimately represent lost opportunities for the world's biggest brick-and-mortar retailer. More than that though, the subscription service will fit neatly within the convenience-minded movement now shaping the consumer landscape.

Walmart is also wading deeper into the healthcare sector.

That effort started in earnest in September, when the company opened its first standalone healthcare clinic, which offered dental services, lab work, and even the ability to get X-rays taken in addition to the usual primary-care options. Since then, Walmart has expanded on the idea of becoming a major healthcare player, confirming just a few days ago it will begin offering health insurance to customers. The move will make even greater use of its growing network of care clinics.

Again, it's all part of a broader lifestyle initiative to make the retailer a more integral part of consumers' daily lives.

Walmart is also making strategic behind-the-scenes moves its customers won't see, yet will still enjoy. For instance, rather than continuing to rely on third-party transportation services that may or may not be able to provide the exact solution the retailer needs, it's now handling more of those duties in-house. In March, it announced it would be expanding its corps of truck drivers with an additional 500 people, Walmart is also hiring its own local drivers to ferry groceries and other goods from nearby stores to shopper's homes, finally realizing outsourcing that work was more complicated and less reliable than it was worth. Both hiring initiatives bring the retailer closer to complete self-sufficiency.

Looking ahead

None of these are developments Amazon can't counter, if it hasn't already. It also remains to be seen to what extent (or even if) Walmart will be able to capitalize on closer relationships with its customers and its improved logistics. That's not been in Walmart's wheelhouse, historically speaking.

This is clearly not your father's Walmart, though -- in a good way.

As Amazon figured out long ago, simply existing as a shopping option isn't enough. A company has to cultivate consumer habits, and delight its customers without them even realizing how well they're being served. The brick-and-mortar giant's stock is the better pick at this time simply because 2020 looks likely to mark Walmart's pivot into becoming just such a lifestyle company. As omnipresent as Amazon may be, it doesn't really have an encore like this to drive new, unexpected growth right now.