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In this Excel tutorial, John explains how to create dynamic data validation lists that automatically update when new items are added to the source range. He demonstrates this using Excel tables and named ranges. The process begins with navigating to the products sheet, where a table is inserted by selecting the "Insert" tab and using the keyboard shortcut Ctrl + T. After ensuring the "My table has headers" checkbox is checked, the table is created, and its name can be modified. This setup allows the data validation list in another cell to reflect any new entries added to the products column automatically.