After tests last year, First Watch is unleashing a new marketing strategy that it believes will help boost traffic in 2025.
The strategy features a digital, data-driven approach that will allow First Watch to target individual customers with ads. It will focus on attracting new customers as well as getting additional visits from existing fans.
It’s the result of years of data collection through First Watch’s waitlist and online ordering and payment systems that has given it a large pool of customer data to work with. “We're at a point now where we can really start to leverage it,” CEO Chris Tomasso said during an earnings call Tuesday.
The chain will also rely on data sets purchased from third parties that will allow it to go after people who profile as First Watch customers but have not yet been to one of its restaurants.
“The hallmark of our approach is that it’s backed with really, really robust customer data,” said Chief Brand Officer Matt Eisenacher in an interview Tuesday. “We’re able to reach people down to the individual level.”
The message itself will differ depending on who those individuals are. For instance, a longtime First Watch customer may see an ad promoting the chain’s seasonal menu, while a newcomer may get something else.
It represents a meaningful uptick in marketing spend at the 572-unit First Watch, though the chain did not say just how much it will cost. The investment will be especially focused in markets where First Watch has a lot of restaurants, such as its home state of Florida.
First Watch has high hopes for the new approach. After a year in which traffic declined by 4%, it is expecting traffic to improve to flat or slightly positive in 2025, in part due to more marketing.
But that’s not the only thing the chain is doing to build traffic this year. Though First Watch has not joined the recent parade of value meal deals, it has invested in value in other ways in an effort to appeal to price-conscious customers.
It is increasing its meat and potato portions in certain dishes, for instance, and has replaced honeydew with more premium fruits like strawberries in its fruit cups. And it’s once again offering free coffee to customers who are waiting to be seated, a tradition that was ended during the pandemic.
At the same time, it has kept price increases to a minimum. Pricing is expected to be around 2% for the full year.
First Watch has also worked to improve its operations by putting more technology and data into the hands of its managers, resulting in lower turnover and faster service. Eisenacher said First Watch is running its restaurants better than it ever has.
The chain believes the combination of the above efforts will make it a strong contender for customers who are being more careful with their spending these days.
“If you’re going to go out to a place, you’re going to pick a place where you know you’re gonna get what you pay for,” Eisenacher said.
First Watch also continues to open new restaurants at a torrid pace. It opened 50 locations last year, including 25 in the fourth quarter alone, and expects to open 59 to 64 this year. They will play a key role in helping the chain reach a predicted 20% revenue increase this year.
In the fourth quarter, First Watch’s same-store sales declined 0.3%, while traffic fell 3%. Executives said traffic has improved in the current quarter despite an uncertain consumer.
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