Reykjavík is Iceland's shopping hub, but creativity and first-rate craftsmanship is on display countrywide. Even in the smallest towns, galleries and stores (plus guesthouses, cafes and museums) exhibit and sell the output of talented locals. Knitwear – especially the lopapeysa, the signature woollen sweater – is ubiquitous, but photography, artwork, fashion and design objects may also catch your eye. Books, foodstuffs and local booze make fine souvenirs.
Before purchasing knitwear, do look to see where it was made. A number of stores stock lopapeysur 'made in China from Icelandic wool' or words to that effect. Buy locally made products where you can.