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In this video tutorial by John from Excel Campus, viewers learn how to create dynamic data validation lists in Excel that automatically update when new items are added to the source range. The tutorial demonstrates setting up a data validation list linked to a products column, ensuring that new entries are included without manual adjustments. The process involves using Excel tables and named ranges. To begin, users are instructed to navigate to the products sheet, insert a table by selecting the Insert tab and using the Ctrl + T shortcut, ensuring the 'My table has headers' option is checked. The table's name can be modified as needed.