Olfactory is a word meaning of or relating to the sense of smell. Special sensory receptors in the nasal cavity receive odor molecules which in turn is relayed to the brain. Certain mammals use their sense of smell to identify and communicate with other members of the same species. The example I used was the North American beaver. These mammals secrete castoreum from castor glands which is then rubbed on scent mounds within the boundaries of their colonies. Olfactory scents are also used in communication and kin recognition. Colonies remain close with families of related beavers and other families find territory outside of the scent mounds.
Reference Sun, L. and Müller-Schwarze, D. (1998). Anal gland secretion codes for relatedness in the beaver, Castor canadensis. Ethology, 104(11): 917-927.