Morocco is known for its fantastic artwork and is a great place for souvenir-shopping. Basically there are only two disadvantages about souvenir-shopping in Morocco: first of all you need a suitcase elephant-size to take all the great stuff that you find. Second problem: for every single thing you want to buy you need to bargain for half an hour and still you will probably pay too much.
The first problem is the same when you come shopping in Western Sahara, but the second is very different here. In Laayoune there is a nice shopping area right in front of the Friday Mosque, where the salesmen are completely different from their colleagues in let's say Marrakesh: they don't speak English (sometimes even only Arabic), they offer you a good price immediately and they don't mind if you're just looking without buying anything.
You can still try to bargain a bit over here, but when you're visiting both Marrakesh and Laayoune (like we did) you'll find that the normal price in Laayoune is a very, very good price in Marrakesh already.
What to buy: Jewelry, pots, glasses, mirrors, lamps, rings, knifes, swords, stools, etc...