This question as stated is a bit trickier than it ought to be, as it combines two facts without telling you:
The group of linear characters $\text{Pic}(G)$ under $\otimes$ is an abelian group, with a canonical isomorphism to the group $\text{Hom}_{Ab}(G^{\text{ab}},\mathbb C^*)$.
For any finite abelian group $A$, the groups $A$ and $\text{Hom}_{Ab}(A,\mathbb C^*)$ happen to be isomorphic.
These facts, taken together show that the groups $\text{Pic}(G)$ and $G^{\text{ab}}$ are isomorphic, but you won't in general find a "natural" isomorphism between them.
As for proving these facts, the first is closer to the spirit of your question, and you should try using the universal property of the abelianisation, along with the fact that one dimensional representations of a group $G$ are group homomorphisms into abelian groups.
If you also wish to prove the second fact, it is more involved, and is generally proven by reducing to the case of a cyclic $p$ group via the classification of finite abelian groups, then verifying that the dual group is also cyclic of the same order.