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In this video tutorial, Mark Davis from Optimum Technology Transfer explains how to use the REPLACE function in Excel. He emphasizes the importance of text or string functions for cleaning and organizing data. Davis highlights his previous videos focusing on these functions and introduces the REPLACE function specifically. He presents an example involving order IDs, which consist of a specific structure: two numbers, followed by four characters, and then three additional numbers. The goal is to standardize these order IDs by replacing the varying four characters with a consistent format, ensuring uniformity across the dataset.