Australia, who won the toss, saw opener Watson top-score with 66 and middle-order batsman George Bailey make a career-best 65.
However, the tourists’ innings was often becalmed, with a mere 24 runs coming in a 10-over spell from overs 21 to 30.
“Rotation of strike is an area of our game we know we need to improve,” Clarke said. “I still think 250 was a competitive total, but I did know we had to bowl very well and hang on to our chances, and we certainly didn’t do that.”
The series continues with a day/night match at Edgbaston in Birmingham tomorrow.